杉杉品牌(01749) - 2024 - 中期业绩

Financial Highlights Consolidated Income Statement In H1 2024, the company's revenue was RMB 476 million, a 4.8% year-on-year decrease; however, profit for the period reached RMB 13.21 million, a 16.8% year-on-year increase, with basic earnings per share at 9.90 cents 2024 H1 Key Performance Indicators | Metric | 2024 H1 (Unaudited) | 2023 H1 (Unaudited) | YoY Change | | :--- | :--- | :--- | :--- | | Revenue | RMB 475,669,316 | RMB 499,457,556 | -4.8% | | Gross Profit | RMB 196,230,128 | RMB 202,843,031 | -3.3% | | Profit before Income Tax | RMB 19,602,851 | RMB 12,716,684 | +54.1% | | Profit for the Period | RMB 13,209,852 | RMB 11,299,408 | +16.9% | | Basic Earnings Per Share | 9.90 cents | 8.47 cents | +16.9% | Consolidated Balance Sheet As of June 30, 2024, the company's total assets were RMB 661 million, total liabilities RMB 404 million, and net assets RMB 256 million, maintaining a stable overall financial position, with net current assets at RMB 165 million Key Balance Sheet Items (As of June 30, 2024) | Metric | June 30, 2024 (Unaudited) | December 31, 2023 (Audited) | Change | | :--- | :--- | :--- | :--- | | Total Assets | RMB 660,687,986 | RMB 726,389,551 | -9.0% | | Total Liabilities | RMB 404,375,213 | RMB 472,614,630 | -14.4% | | Net Assets | RMB 256,312,773 | RMB 253,774,921 | +1.0% | | Cash and Cash Equivalents | RMB 76,061,479 | RMB 143,224,055 | -46.9% | | Interest-bearing Bank Borrowings | RMB 135,000,000 | RMB 135,000,000 | 0.0% | Management Discussion and Analysis Business Review In H1 2024, the company maintained stable performance with slight revenue decline but profit growth, focusing on core brands, initiating a digital transformation industrial park project, and optimizing its omnichannel marketing network - In H1 2024, the company's operating revenue was RMB 475.7 million, a 4.8% year-on-year decrease; profit was RMB 13.2 million, a 16.8% year-on-year increase[44] - Initiated the SHANSHAN Brand 5G New Quality Productivity Industrial Park project, aiming to create a benchmark industrial park integrating R&D, design, new retail, intelligent manufacturing, and warehousing[45] - Continuously optimized channels, reducing offline store count from 709 to 677, a 4.5% decrease, while increasing investment in online e-commerce such as live streaming and social commerce[45] Financial Review This period's financial performance shows a trend of slight revenue decrease and profit growth, with total revenue down 4.8% mainly due to reduced SHANSHAN brand franchisee revenue, while a 7.9% decrease in sales and distribution expenses was the primary driver of profit growth Revenue Analysis Total revenue decreased 4.8% year-on-year to RMB 476 million, primarily due to reduced SHANSHAN brand franchisee revenue, with e-commerce platform revenue significantly growing to 36.0% of total, and FIRS brand revenue increasing 20.6% as a key growth driver Revenue by Sales Channel | Sales Channel | 2024 H1 (RMB thousands) | % of Total | 2023 H1 (RMB thousands) | % of Total | | :--- | :--- | :--- | :--- | :--- | | E-commerce Platforms | 171,230 | 36.0% | 144,324 | 28.9% | | Franchisee Sales | 94,390 | 19.8% | 145,154 | 29.1% | | Self-operated Retail Stores | 74,109 | 15.6% | 73,690 | 14.7% | | Trademark Licensing Income | 53,791 | 11.4% | 43,390 | 8.7% | | Distributor Sales | 47,316 | 9.9% | 52,606 | 10.5% | | Professional Wear | 34,833 | 7.3% | 40,293 | 8.1% | | Total | 475,669 | 100% | 499,457 | 100% | Revenue by Brand | Brand | 2024 H1 (RMB thousands) | % of Total | 2023 H1 (RMB thousands) | % of Total | YoY Change | | :--- | :--- | :--- | :--- | :--- | :--- | | FIRS | 339,122 | 71.3% | 281,140 | 56.3% | +20.6% | | SHANSHAN | 133,170 | 28.0% | 214,554 | 43.0% | -37.9% | | Others | 3,377 | 0.7% | 3,763 | 0.7% | -10.3% | | Total | 475,669 | 100% | 499,457 | 100% | -4.8% | Gross Profit Analysis Gross profit slightly decreased by 3.3% to RMB 196 million from RMB 203 million in the prior period, primarily due to the reduction in total revenue - Gross profit decreased by 3.3% from RMB 202.8 million to RMB 196.2 million, primarily due to reduced revenue in the current period[48] Expense Analysis Sales and distribution expenses decreased 7.9% year-on-year to RMB 152 million due to lower franchisee commissions, while administrative expenses increased 7.9% to RMB 21.8 million due to higher staff remuneration, and finance costs decreased 5.4% due to lower interest on lease liabilities - Sales and distribution expenses decreased by 7.9% from RMB 164.7 million in the prior period to RMB 151.7 million, primarily due to lower franchisee commissions from reduced revenue in cooperative arrangements[51] - Administrative expenses increased by 7.9% from RMB 20.2 million in the prior period to RMB 21.8 million, mainly due to increased staff salaries and bonuses[52] - Finance costs decreased by 5.4% from RMB 3.7 million in the prior period to RMB 3.5 million, primarily due to reduced interest expenses on lease liabilities[54] Profit for the Period Profit for the period increased 16.8% year-on-year to RMB 13.2 million, primarily driven by effective control over sales and distribution expenses - Profit for the period increased by 16.8% from RMB 11.3 million for the six months ended June 30, 2023, to RMB 13.2 million in the current period, primarily due to reduced sales and distribution expenses[56] Working Capital Management The company's working capital efficiency remained largely stable, with average inventory and trade receivables turnover days slightly increasing to 152 and 77 days respectively, while average trade payables turnover days remained at 85 days Average Turnover Days | Metric | 2024 H1 | 2023 Full Year | | :--- | :--- | :--- | | Average Inventory Turnover Days | 152 days | 149 days | | Average Trade Receivables Turnover Days | 77 days | 74 days | | Average Trade Payables Turnover Days | 85 days | 85 days | Liquidity and Financial Resources The company's financial position is stable, but cash and cash equivalents significantly decreased from RMB 143 million at the beginning of the period to RMB 76.1 million at the end, while total bank borrowings remained at RMB 135 million, and the gearing ratio slightly increased from 18.6% to 20.4% - Cash and cash equivalents decreased from approximately RMB 143.2 million as of December 31, 2023, to approximately RMB 76.1 million as of June 30, 2024[58] - Total bank borrowings remained at approximately RMB 135 million. The gearing ratio (total borrowings/total assets) increased from 18.6% at the end of 2023 to 20.4%[58] Major Investments and Future Plans The company is advancing an industrial park project with an estimated total cost of RMB 280 million, to be funded by internal resources and bank borrowings, with approximately RMB 110 million in construction contracts signed as of the reporting period end - The total estimated cost for the industrial park project is RMB 280 million, to be funded by the Group's existing internal resources and bank borrowings[65] - As of June 30, 2024, construction contracts for the industrial park project totaling RMB 109,576,462 have been signed[65] Prospects and Plans In H2 2024, the company will continue to focus on its suit single-product strategy, enhance product technology innovation, upgrade brand image, and drive digital transformation, optimize channel structure, expand core markets, and deepen engagement in emerging e-commerce - Future plans include continuing to focus on the suit single-product strategy, centered on 'fit + technology' as the creative essence, to drive continuous advancement and upgrading of product technology[69] - The company will continue to advance enterprise digital transformation, optimizing aspects such as product design, supply chain management, and marketing, while actively optimizing channel structure and deepening engagement in emerging areas like live streaming and social e-commerce[69] Notes to Financial Statements Summary Revenue and Segment Information The company operates a single reportable segment in China, engaged in apparel trading, with revenue primarily from apparel transactions and trademark licensing, and e-commerce platforms being the largest sales channel, accounting for 36% - The company has only one single reportable segment engaged in apparel trading in China, with all operations and non-current assets located in China[11][14] Revenue by Major Product/Service | Product/Service | 2024 H1 (RMB) | 2023 H1 (RMB) | | :--- | :--- | :--- | | Apparel Trading | 421,878,831 | 456,067,663 | | Trademark Licensing Income | 53,790,485 | 43,389,893 | Dividend Policy The Board resolved not to declare an interim dividend for 2024. The company paid a final dividend of RMB 8 cents per share for the year ended December 31, 2023, totaling approximately RMB 10.67 million, on August 2, 2024 - The Board resolved not to declare an interim dividend for the six months ended June 30, 2024[19][62] - The 2023 final dividend of RMB 8 cents per ordinary share, totaling approximately RMB 10,672,000, was approved and paid on August 2, 2024[18] Key Asset and Liability Items As of the reporting period end, net trade receivables decreased to RMB 177 million from the beginning of the period, with most within three months. Total interest-bearing bank borrowings were RMB 135 million, all short-term and due within one year, guaranteed by major shareholders and directors - Net trade receivables decreased from RMB 222 million at the end of 2023 to RMB 177 million, with the highest proportion of accounts within three months[23][24] - Total interest-bearing bank borrowings amounted to RMB 135 million, all due within one year. Of this, RMB 75 million is guaranteed by the major shareholder SHANSHAN Group and individual directors, and RMB 60 million by a subsidiary[31] - The company is constructing a comprehensive building including an R&D center, intelligent manufacturing plant, and warehouse, with approximately RMB 5.58 million paid for construction in progress during the reporting period[22] Related Party Disclosures The company's related party transactions primarily include sales to subsidiaries of major shareholders, payment of rent and utilities, and trademark licensing agreements with major shareholder SHANSHAN Group. Additionally, some bank borrowings are guaranteed by major shareholders and directors - Related party transactions with major shareholders include sales, leases, and utilities[33] - Signed trademark licensing agreements with major shareholder SHANSHAN Group and made related payments[36][37] - Bank borrowings of RMB 75 million are guaranteed by major shareholder SHANSHAN Group Co., Ltd., individual directors, and a property charge held by a director[31] Corporate Governance and Other Information Compliance with Corporate Governance Code The company complied with most provisions of the Corporate Governance Code during the period, with one deviation: the roles of Chairman and CEO are combined in Mr. Luo Yefei, which the Board believes aids business strategy execution with sufficient checks and balances - There is a deviation from Corporate Governance Code provision C.2.1, where the roles of Chairman and Chief Executive Officer are not separate, both held by Executive Director and Chairman Mr. Luo Yefei[70] Dividends and Share Repurchase The Board did not recommend an interim dividend. During the reporting period, neither the company nor any of its subsidiaries purchased, sold, or redeemed any of the company's listed securities - The Board resolved not to declare any interim dividend for the current period[62] - During the period, the company did not redeem any of its H shares listed on the Stock Exchange, nor did the company or any of its subsidiaries purchase or sell any such H shares[72]